The funding will support the roll-out of mini-grids powered by clean and affordable energy sources across the West-African country, where 90 million people have no access to electricity.
British International Investment (BII), the UK’s development finance institution, has committed $7.5m (€6.4m) to a financing facility with US-based climate tech firm Odyssey Energy Solutions to fund developers of mini-grids in Nigeria.
The money will be used to install thousands of solar mini-grids and standalone solar systems via Nigeria’s Distributed Access through Renewable Energy Scale-Up (DARES) programme. Backed by the World Bank, this programme is focused on providing 17.5 million Nigerians with better access to energy.
Under the new facility, mini-grid developers will be allowed to buy high-quality solar and energy storage equipment with minimal upfront costs. They only have to start paying those back once their new equipment starts generating revenue.
“About 90 million people in Nigeria do not have access to electricity. Mini-grids powered by clean and affordable energy sources have a vital role to play in rapidly reducing that number. I am delighted that BII is partnering with Odyssey to accelerate the development of such projects,” said Benson Adenuga, West Africa regional director at BII.
Climate finance commitments
BII, which has total net assets of £9.87bn (€11.4bn) and investments in over 1,600 businesses across 66 countries, is directing at least 30% of its new commitments by value to climate finance between 2022 and 2026.
Headquartered in Boulder, Colorado, Odyssey’s single platform aims to help speed up capital deployment for renewable projects by linking solar developers to equipment manufacturers, financiers and governments. It currently has more than $3bn in financing available and is used by more than 3,000 renewable energy firms in more than 50 countries.
“BII has demonstrated a progressive and practical approach to unlocking financing challenges in distributed energy. Their support allows us to offer flexible, affordable financing options that meet developers where they are, so that we can collectively accelerate electrification across Nigeria,” said Piyush Mathur, co-founder and managing director of Odyssey Energy Solutions.
“This is a signal that opportunities for the private sector to drive forward the renewable energy revolution in Nigeria and across Africa are growing,” said Jonny Baxter, the UK deputy high commissioner in Lagos.
As previously reported by Impact Investor, in July BII announced that it had joined Swedfund and Zambia’s National Pension Scheme Authority in the launch of an investment company to provide long-term, flexible capital to SMEs in Zambia, backed by $70m of initial funding.
